The tax target is tips – they will be taxed as wages

The tax authorities are targeting tips left by clients to employees, since they are considered additional remuneration and are taxed like wages.

According to the decision of the Supreme Court of Greece, even a small amount left by a client to an employeeshould be considered part of the salary and subject to deductions and insurance contributions. Vice President of the Restaurant Federation Georgios Kourasis explained to SKAI that The problem arose after combining POS with cash registers.

If, for example, a customer pays with a card for 100 euros and leaves a tip of 10 euros, there is a special button on the cash register to register the tip so that there are no violations. Tips are not subject to VAT, but are taken into account as unpaid transactions, and at the end of the month the company returns them to the employee along with social security contributions.

If the correct procedure is not followed and a difference in turnover arises – for example, the amount of 110 euros is entered in the cash register, and 100 euros in the cash book – tax problems arise.

In addition, at the end of the year, tips will be included in employee tax returns as additional remuneration. Kurasis said in more detail:

“Tipping for an entrepreneur is a trap and an easy violation that can be committed if certain rules are not followed. According to the Supreme Court decision, tips are now considered wages. Therefore, they must be accrued in the form of the employee's salary, that is, subject to insurance contributions, deductions, etc., and also have all the rights that they entail in terms of holiday, Easter and Christmas bonuses. If the bill for 100 euros is issued by the cashier. He goes to the client, he says that he will pay by card, they hand him a cash register and say that instead of 100, put 10 euros for the staff. According to Mr. Pitsilis's order of 2023, this is considered a deferred transaction.

This does not create a problem for the company, and at the end of the month it gives the employee an additional amount from the tip, deducting social security contributions. At the end of the year, these fees will be reflected on the payroll as additional compensation, which means higher taxes for the employee. In addition, if the check is 100 euros and the tip is 110 euros, the cash register receipt will show 100 euros, which is the customer's purchase price. This creates a difference in turnover. If you do not follow this procedure, this may be recognized during a tax audit, and a fine for a violation may come to the store from where it was not expected. Therefore, it is more convenient to tip in cash. It's a personal deal.”

Source link